Electrolux Group has released a statement outlining its plans to step up its cost reduction efforts, it expects its efforts will result in a net cost saving of SEK 10-11bn (£738,445 – £812,377) in 2024.
The company has put its struggles down to weak consumer demand and competitive pressure in the market, it plans to restructure its business during the final quarter of 2023.
President and CEO, Jonas Samuelson, said: “We are therefore accelerating structural cost reductions and execution of product cost measures. Hence, the cost reduction target for 2024 vs 2022 is increased to SEK 10-11bn (£738,445 – £812,377), compared to the previous target of over SEK 7bn (£517,072).
“The new target comprises net cost reductions from Cost efficiency and Investments in innovation and marketing, combined. For 2023 the target is to reach cost reductions of approximately SEK 6bn(£443,337), year-over-year, compared to the previous target of at least SEK 5bn(£369,337).”
The statement provided some details on how it will be moving forward in the coming years; it plans to restore margins and “return to profitable growth” in order to execute its strategy to deliver sustainable digital consumer experiences.
Electrolux said: “The ongoing cost reduction progress, while ahead of plan, is not sufficient to restore margins given the price pressure from input cost discrepancies.”
It plans to target the mid-range and premium categories with its main brands, where driving even more targeted portfolio management.
Moving forward the company plans to restructure its organisation into two global product lines, three regional business areas and four global functions – who will all report to the CEO.
The two product lines will have the global, end-to-end responsibility to prioritise the growing and profitable product categories where Electrolux Group will focus its business and investments, leveraging global scale with speed and lower cost. Dan Arler has been appointed Head of Product Line Taste and Ian Banes has been appointed Head of Product Line Care.
